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660,000 companies borrowed under the loan guaranteed by the State for 120 to 130 billion euros, ie a recourse rate of 20%.
The loans are repayable over a period of 6 years with a first year without repayment.
Faced with the growing anxiety in companies about this new debt to be repaid, the government announced in mid-January that companies can choose to postpone the start of repayments for one more year but, in this case, the repayment must be done all the same over the same total period of 6 years, which increases the amount to be reimbursed per year, which is unthinkable for many VSEs and SMEs.
There is now an urgent need to make the repayment conditions more flexible and extend the deadlines because decisions in this area must be taken on the anniversary date of the loan ...
Read also: Loans guaranteed by the State: Bercy is studying several avenues to adapt the device
The loan can represent up to 3 months of the company's 2019 turnover and must not exceed 25% of the turnover or 2 years of payroll for a business being created.
The guaranteed amount 90% for companies and 70% for more than 5,000 employees.
Government guaranteed loans can be signed until June 30, 2021. Repayment was initially deferred for one year.
On January 14, Bruno Le Maire announced that the start of reimbursement of an EMP could be postponed for an additional year.
And that's good news.
But there are still a lot of unanswered questions:
Repay over 5 years or over 4 years?
For business leaders, the choice is not obvious: either they choose to postpone the start of repayments by one year (while moving to amortization over 4 years, or they start repaying after one year). by remaining on an amortization over 5 years.
What if the company wishes to repay its EMP in full within 2 years?
Many companies, 65% according to many sources, have taken out loans guaranteed by the State but have not consumed it to keep cash in the face of the health and economic uncertainty that reigns and would like to keep cash and power. repay in one year without charge.
These companies can decide at the end of the first year to repay their government guaranteed loan in full, but not after two years because, 2 to 4 months before the first anniversary of the EMP grant date, the heads of 'companies must negotiate their personalized repayment schedule with their bank: the 200,000 companies that obtained their EMP in April 2020 must therefore already choose in total vagueness.
And they will be 140,000 more for the month of May, 170,000 for June, 50,000 for July and 100,000 between August and December 2021.
It is not flexible enough for businesses.
Those who have not used the loan for more than a year must be able to repay it free of charge.
It is urgent to extend the maximum repayment period to 8 years or even better to 10 years
The government is currently negotiating with the European Commission to extend the repayment period up to 8 years as in Spain but this risks increasing the cost of the state guarantee (between 0.5 and 1%) and therefore the rate of loan which may already be high since the State has set it at a maximum of 2.5% (including its guarantee) even though companies can borrow today at 0.45% over 5 years ...
Germany has solved this problem by differentiating between the repayment term and the guarantee: thus German companies, through the KFW state-guaranteed loan program, can repay over 10 years with a state guarantee that comes under the nails of the European Commission since limited to 5 years.
This is a track that deserves to be explored.
There is an urgent need to improve the system by extending repayments over 10 years without increasing the rates and by making the early repayment conditions more flexible and by setting a maximum rate rather at 1.5 or 1.75%.
Companies have an interest in it and the State also so that the number of EMPs that will never be reimbursed (estimated between 4% and 7% of the total, or about 9 billion) is as low as possible.